Attorneys James T. Carey and P. Zachary Stewart

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Nonexempt day rate workers entitled to overtime pay

On Behalf of | Apr 15, 2020 | FLSA Misclassification, Overtime And Wage Issues

Employers violate federal law by failing to pay all wages required

Employers violate the Fair Labor Standards Act (FLSA) by paying non-exempt workers a “day rate” without paying any overtime wages that may be due. A “day rate” is a lump sum or salary paid to a worker for paid for a single day’s work regardless of the number of hours of work. Under the FLSA, overtime wages must be to non-exempt workers for all hours worked over forty (40) hours in a week at one and one-half times the worker’s regular rate for that week of work. Day rate violations are surprisingly common.

The oil and gas industry, for instance, has a lengthy history of these violations. Individuals in the oil and gas industry often work in excess of 80 hours in a week but may not receive payment for overtime. Employers may erroneously tell workers that they aren’t entitled to overtime pay because they have agreed to work for a “day rate” or the employment contract does not provide for overtime pay. Workers may mistakenly believe these employment terms to be true. However, the legal reality is the FLSA takes priority over an employment contract. Employers are not permitted to contract around the requirements of the FLSA to avoid paying overtime wages.

How paying a day rate may cause an overtime pay violation

As an example, let’s pretend an FLSA non-exempt worker is paid a day rate of $300.00 per day. This worker works seven (7) days per week and twelve (12) hours on each of those days. This worker would then have wages of $2,100.00 for 84 hours of work that work. Great money, right? Yes, but the problem here is that employer has violated the FLSA by failing to pay this worker overtime wages for 44 of those hours. This non-exempt worker can file a lawsuit under the FLSA to get the overtime wages the worker earned.

Calculating overtime for workers paid a day rate

The following calculation shows how much money the worker above has been shorted by the employer as well as how much money the worker would be awarded under the FLSA. First, we need to determine the “regular rate” for the worker. The regular rate is all regular wages and compensation earned in the week divided by the number of hours worked that week. The hourly rate in this example is $25.00 per hour ($2,100.00/84 hours). Next, we must determine the overtime premium. The overtime premium is one-half (0.5) of the regular rate. The overtime premium in this example is $12.50 ($25.00 x 0.5). We then multiply the overtime premium of $12.50 times the number of overtime hours worked (44 hours). This results in unpaid overtime in the amount of $550.00 ($12.50 x 44 hours) for that week of work. That’s $550.00 the worker earned and should have been paid.

If an employer violates the FLSA by failing to pay overtime wages, the law states the individual succeeding in a claim shall receive the unpaid wages from that week of work ($550.00) plus liquidated damages in an amount equal to the unpaid wages (another $550.00). Therefore, by law, the worker in this example is entitled to $1,100.00 in damages for employer’s failure to pay overtime.

The FLSA permits the worker to make a claim going back as far as two years (three years for willful violations) from the date of filing a lawsuit, plus as far into the future until the employer’s pay practices change over to being legal. Therefore, this worker could potentially make an FLSA claim for as much as $171,600.00 if that individual worked 84 hours per week, every week, for the past three years ($1,100.00 x 52 x 3). The FLSA then also requires that the violating employer pay the worker’s attorney fees and legal costs in addition to the damages owed to the worker.

Independent contractors paid a day rate

Employers have a history of misclassifying their workers as “independent contractors”. This practice is done so employers can try to (illegally) avoid paying workers overtime wages and other benefits. Just because a person was hired as an independent contractor does not mean the person really is an independent contractor in the eyes of the Fair Labor Standards Act. As stated above, the employment contract or employment agreement does not control whether a person is an independent contractor. Instead, the Courts apply an “economic realities test” to determine whether the person is an “independent contractor” or an “employee”. An experienced wage and hour attorney can help determine whether a worker has been misclassified under the FLSA and owed overtime wages.

Call us now to start your overtime claim

Our office has investigated dozens of overtime violations, including workers illegally paid a day rate without overtime wages. Those investigations have resulted in millions of dollars in settlements collectively to hard-working individuals. Call  Carey & Stewart Attorneys At Law today at 304-914-3577 for a free and confidential consultation or contact us here. We can help you get the wages you have earned and you are owed.